Serpentine Technologies Limited (ASX: S3R)
, is an IT sector company engaged in the designing, development and commercialisation of application software. The Company offers an e-commerce platform for home designers and business operations across the world.
On April 29th
, 2019, Serpentine announced to have entered into a binding agreement to acquire 100% of the issued capital of Keyhole TIG Limited
. K-TIG is a revolutionary welding technology that seeks to disrupt the industry and change the economics of fabrication. The company has existing customers across 20 countries including General Electric, Siemens, Bilfinger and Doncasters.
On acquisition, the company intends to change the name to ‘K-TIG Limited’ upon successful shareholder approval.
K-TIG’s high speed precision technology can yield up to 100 times faster than the traditional TIG welding methodology and achieve full penetration in a single pass in materials up to 16 mm in thickness and typically operates at twice the speed of plasma welding. Besides, K-TIG is known to have been widely applicable and is specifically best suited to corrosion-resistant materials including nickel alloys, stainless steel, titanium alloys as well as the most exotic of materials. It can manage longitudinal as well as circumferential welds on vessels, spooling, pipes, tanks and other kinds of materials in a single pass.
More interestingly, K-TIG owns all rights, title and interest in and to the proprietary and patented technology, which was originally developed by the CSIRO. It has also been awarded the Australian Industrial product of the year award in 2014 and the DTC Defence Industry Member Award in 2015.
Subject to the shareholders’ approvals and due diligence by each party to transaction, the terms and conditions of the agreement include around 4,571,428,571 Ordinary fully paid ordinary shares (consideration shares) in the capital of the Serpentine issued at a deemed price of $ 0.0035 cents per S3R Share. In addition to the Consideration Shares, Serpentine will also issue around 1,714,285,714 deferred consideration shares in three tranches until January 2020.
Accordingly, K-TIG completed an oversubscribed capital raise of $ 1.35 million via convertible notes which converts to shares in Serpentine at a 40% discount to the completion price of $ 0.20 per share. The convertible note-raise received support from several institutional funds and sophisticated investors.
In addition, Serpentine has also declared that it would be undertaking a capital raising of at least $ 5 million at a price of $ 0.20 per share to support the continued global expansion of the K-TIG business, fund further research and development on new applications for the technology, provide working capital, and for the costs of the acquisition.
Serpentine has around 722.1 million outstanding shares. The S3R stock last traded on February 26th
, 2019, at AUD 0.004 and the company’s securities were suspended from quotation on March 4th
, 2019, pending compliance with Chapters 1 and 2 of the Listing Rules.
For the half-year ended December 31st
, 2018, the company reported a 100% fall in its revenue from ordinary activities along with a loss after tax of $ 193,461. The net assets at the end of the period were valued at around $ 207,500, including cash and cash equivalents of $ 295,390. The operating cash out flows amounted to $ 235,071 during the six months.
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